Borrowing money for college these days seems all but inevitable for everyone but the wealthiest individuals. That is why now more than ever, it is necessary for prospective students to brush up on the subject of student loans so that they can make sound financial decisions. The material below is intended to assist with exactly that.
If you are having a hard time paying back your student loans, call your lender and let them know this. There are normally several circumstances that will allow you to qualify for an extension and/or a payment plan. You will have to furnish proof of this financial hardship, so be prepared.
Stay in contact with your lender. Make sure you update them with your personal information if it changes. Also, make sure that you immediately open and read every piece of correspondence from your lender, both paper and electronic. Take any requested actions as soon as you can. If you miss any piece of information, you may end up spending more money.
Try getting a part-time job to help with college expenses. Doing this can help you cover some of your student loan costs. It can also reduce the amount that you need to borrow in student loans. Working these kinds of positions can even qualify you for your college’s work study program.
Pay extra on your student loan payments to lower your principle balance. Your payments will be applied first to late fees, then to interest, then to principle. Clearly, you should avoid late fees by paying on time and chip away at your principle by paying extra. This will reduce your overall interest paid.
It is best to get federal student loans because they offer better interest rates. Additionally, the interest rates are fixed regardless of your credit rating or other considerations. Additionally, federal student loans have guaranteed protections built in. This is helpful in the event you become unemployed or encounter other difficulties after you graduate from college.
To keep your overall student loan principal low, complete your first two years of school at a community college before transferring to a four-year institution. The tuition is significantly lower your first two years, and your degree will be just as valid as everyone else’s when you graduate from the larger university.
It seems that hardly any young student nowadays can complete a degree program without incurring at least some student loan debt. However, when armed with the right type of knowledge on the topic, making smart choices about loans really can be easy. Using the tips found in the paragraphs above is a great way to start.